Tenants in Nairobi could be headed for a real reprieve after a second survey revealed stabilising housing prices in the last quarter of 2015.

The Kenya Bankers Association Housing Price Index for the quarter, released Wednesday, attributed the stability to an increased supply of apartments and a growing middle class preferring to own rather than rent houses.

KBA director of research Jared Osoro said the market is on firm ground, in line with the improved microeconomic environment, including a stronger currency and stable economic growth.

“Most areas traditionally developed for rentals are now shifting to develop for sales to respond to the market. Houses put up for rent will, therefore, start becoming less attractive as more people seek to own houses.

Increased supply

There is also an increased supply of apartments, which are also coming up in areas usually preserved for single units and investors seek to get more returns,” said Mr Osoro Wednesday.

According to the survey, the average house prices in Kenya rose by a mild 1.14 per cent in quarter four, compared to 1.25 per cent in quarter three of 2015. KBA says the slower change in house prices in the past three years, averaging a single digit over the 8.19 per cent, is a sign of “a possible softening in the underlying rate of price change.”

A similar survey released on Monday by HassConsult pointed at a drop in rental yields, with apartment landlords experiencing the biggest revenue dip of 2.3 per cent.

The bankers association chief executive Habil Olaka said the construction industry had received massive support from the financial institutions, enabling it to put up more housing units. He said the market will, however, remain less volatile so as not to deter potential investors.